Unemployment Applications Remains Below 300000 for 79th Straight

THE NUMBERS: The Labor Department said Thursday that the number of applications for jobless aid slid by 4,000 last week to a seasonally adjusted 259,000, lowest since mid-July. A temporary spike next week as a result of the impact of Hurricane Hermine is a reasonable bet, but we see no reason to expect the trend in claims to rise anytime soon, unless you think the sudden dip in the August ISMs will be sustained. The prior week’s reading was unrevised at 263 000.

With the labor market near full employment and the economy’s recovery from the 2007-09 recession showing signs of aging, the slowdown in job growth is normal.

“This marks 79 consecutive weeks of initial claims below 300,000, the longest streak since 1970”, the department said in a statement.

The number of people collecting unemployment checks has fallen more than 5 percent from a year ago to 2.14 million. “The estimates are based on historical trends and normally do not deviate much from the actual data”.

Despite very low layoffs, the Federal Reserve is widely expected to keep interest rates unchanged at its upcoming September 20-21 policy meeting in the wake of a slowdown in job growth last month and a contraction in manufacturing activity.

The four-week average of claims, a less-volatile measure than the weekly figure, declined to 261,250 from 263,000 in the prior week.

The four-week average of the so-called continuing claims slipped 4,000 to 2.15 million. Hiring in August produced 151,000 new positions, according to figures released last week, still solid but well below July’s level and below analyst expectations. The unemployment rate had been expected to edge down to 4.8%.

THE TAKEAWAY: Unemployment claims are a proxy for layoffs. Proof, some analysts say, that the job market remains healthy.

The labor department reported Wednesday that job openings are up, but hiring isn’t keeping up – this could indicate employers are struggling to find qualified workers.